Lincoln Mercury to Leave Irvine

The Ford division, which moved west four years ago in search of a new identity, will return to Michigan next year.

Ford Motor Co.'s Lincoln Mercury unit, which relocated from Michigan to Southern California four years ago in search of a soul, is going back home.

Employees at Lincoln Mercury's world headquarters in Irvine were given the news during a staff meeting Friday morning: All 90 will be offered relocation assistance, and some jobs will remain in Southern California. But as of next summer the world headquarters for Ford's upscale domestic brands will be back in Dearborn.

Lincoln Mercury's move to Southern California in the summer of 1998 was hailed by economic development specialists as a boon to the region.

Indeed, the move was followed by Ford's decision to relocate the North American headquarters of its Premier Automotive Group -- which consists of Aston Martin, Jaguar, Land Rover and Volvo -- and its 500 employees to Irvine.

Those companies brought with them a host of suppliers, including advertising and marketing specialists. Most of those firms are expected to stay in the region, but Lincoln spokeswoman Nancy Carollo said Friday that about 50 contract employees, many of them with the Irvine office of advertising firm Young & Rubicam, will be affected.

Ford's European brands, grouped under the Premier Automotive banner, will remain in the five-story glass-and- concrete headquarters the company opened in Irvine a year ago.

Mazda North American Operations, the U.S. arm of Ford-controlled Mazda Motor Corp., also will remain in Irvine, where it has been since 1987.

Lincoln Mercury's relocation was accompanied by a blaze of headlines and pronouncements that the stagnant division was moving west to find a new, modern American identity in a more culturally diverse locale.

The region is home to the U.S. headquarters of eight Asian automakers, including Japan's Big Three: Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co.

Southern California also boasts 19 automotive design studios, the biggest automotive design school in the country and several thousand automotive performance and appearance equipment manufacturers.

"There is an argument for going to California," said Michael Flynn, director of the University of Michigan's Office for the Study of Automotive Transportation. "Lincoln Mercury wasn't out there long enough to see if it paid off."

But Ford, which was riding high when the move was made, soon began foundering amid numerous model recalls, slumping sales and financial losses. Insiders said the automaker never supported the unit with the logistical underpinnings needed to make it work.

Although Lincoln Mercury's top administrative and marketing people moved to Irvine, Ford kept the product planners, designers, engineers and manufacturing specialists in Dearborn.

"Moving here was a bold attempt to do something different," said George Peterson, a former Lincoln executive who is president of AutoPacific Inc., an automotive-marketing consulting firm in Tustin. "But it is hard to get Detroit-oriented management people to do business in a different way. My sense is that it has pretty much been business as usual since they moved out here."

Lincoln sales have dropped almost 5% since the move, and Mercury sales are off about 28%.

Darryl Hazel, who has been Lincoln Mercury president since August, is the third to hold that post since the 1998 move. He said returning to Dearborn "is the right thing to do."

He said that despite his predecessors' pronouncements that being in California had opened their eyes to new possibilities for the Lincoln and Mercury brands, he didn't believe the move made "any huge change in the way we look at and approach the market."

In Orange County, local economists and Irvine city officials said the unit's departure would not spell disaster.

"In numerical terms this is not a big impact," said Irvine Mayor Larry Agran. "But, of course, it is always unfortunate when a prestigious automaker leaves your community and heads back to Detroit."

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Times staff writers Dan Weikel in Costa Mesa and Terril Yue Jones in Detroit contributed to this report.